Cambodian Prime Minister Hun Sen launched it in Phnom Penh's Peace Palace in front of the leaders of the 16 countries and hundreds of officials and ministers.

He said there was no doubt that the comprehensive economic partnership would become a modern, high quality agreement aimed at transforming the region into an integrated market of over 3 billion people with a combined gdp of $US19.78 trillion based on 2011 figures.

"The launch of the RECP negotiations comes at a crucial time when the global financial and economic situation remains uncertain, especially when the economic situation of many developing countries remains fragile."

He said East Asia was considered the engine of global growth.

"We therefore have to jointly maintain this momentum by ensuring that our markets are kept open and continuously enhance the competitiveness even in the most challenging times."

Mr Key said later that the deal offered New Zealand the opportunity for the first time to negotiate a free trade deal with Japan.

He said it would complement New Zealand's existing free trade deals in Asia.